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TREASURIES-Bonds edge up in Asia as stocks slip
April 5, 2012 / 3:52 AM / 6 years ago

TREASURIES-Bonds edge up in Asia as stocks slip

TOKYO, April 5 (Reuters) - U.S. Treasuries edged higher in Asia on Thursday, after a weak Spanish bond sale pressured stocks, revived European debt fears and offset fading expectations of more U.S. monetary stimulus.

* Spain’s borrowing costs jumped at bond auctions on Wednesday, rekindling concerns about funding difficulties by lower-rated euro zone countries.

* The yield on the 10-year notes inched down to 2.22 percent from 2.23 percent in late U.S. trade and 2.28 percent in Asia on Wednesday.

* The thirty-year bond yield fell to 3.36 percent from 3.38 percent in U.S. trading, and from 3.41 percent in Asian on Wednesday.

* Treasuries marked their biggest sell-off in three weeks on Tuesday, after minutes from the latest U.S. Federal Reserve meeting dashed hopes that further stimulus measures were forthcoming.

* “There was a bit overreaction to the FOMC minutes, with no indication at all that the Fed would move the peg,” said a trader at a European brokerage in Tokyo. “People who had steepening trades on, they had to take a little of that off.”

* Still, he said, the medium-term trading outlook is unclear due to economic uncertainties, leading some to question the appeal of U.S. fixed-income assets.

“This is the first time in the last 30 years that 10-year yields are below core inflation, so if you buy 10-year notes, you have effectively locked in a loss for the next 10 years,” he added. “Where’s the risk-reward there?”

* MSCI’s broadest index of Asia Pacific shares outside Japan fell 0.5 percent, and Japan’s Nikkei average slid 0.9 percent.

* On the data front, U.S. private-sector jobs data by payrolls processor ADP showed employers added 209,000 jobs in March, above a 200,000 forecast.

Investors await further confirmation of a strengthening labor market from the nonfarm payrolls report on Friday, which is expected to show an increase of 203,000 jobs last month.

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